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Cable could be on its way to find a short-term bottom, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected GBP to break the 1.2790 support last Friday but were of the view, “the next support at 1.2750 is likely out of reach”. In line with expectation, GBP dropped to a low of 1.2777 before rebounding quickly. The recent weakness in GBP is showing sign of stabilizing and from here, the risk of a clear break of 1.2777 is not high. That said, it is premature to expect a significant recovery. GBP is more likely to consolidate and trade sideways at these lower levels, expected to be between 1.2800 and 1.2870″.

Next 103 weeks: “There is not much to add to last Friday’s (26 Oct, spot at 1.2820) update. As highlighted, any weakness below the strong 1.2790 support could be limited to 1.2750. GBP subsequently dropped to a low of 1.2777 before rebounding strongly and broke a 4-day losing streak, albeit not by much (NY close of 1.2827, +0.07%). Until the ‘key resistance’ at 1.2890 (level previously at 1.2920) is taken out, another dip closer to 1.2750 is not ruled but after last Friday’s price action, it seems increasingly likely that GBP is searching and possibly close to finding a short-term bottom”.